Managing Your Finances: Tips and Tricks for Going It Alone

There are a long list of benefits and drawbacks of working with a financial advisor. But just because you’re a veterinarian and most likely earning well doesn’t mean you have to or necessarily want to work with a broker, analyst, or advisor. If you prefer to go it alone, no matter what the reason, there are a few things you can do to get and stay on track.

Simplify What You Can

There are undoubtedly veterinarians who love to get into the nitty gritty of certain stocks and bonds, investment vehicles and strategies, growth funds and options, even hedge funds and corporate bonds. And that’s perfectly fine. For most, though, running a practice, family obligations, and pursuing other interests may mean less time to focus on the specific investment strategies that might benefit your portfolio the most.

The deeper you dive into the details of your investments, the more tinkering you may do, and you may ultimately find complexity creeping into your portfolio. If this is the case, think about simplifying. Three quick and easy ways to do this:

• Look into investment vehicles that are themselves somewhat diversified, such as index funds or lifecycle funds.

• Diversify your investments yourself. I know it sounds odd to decrease complexity by diversifying, but by owning a variety of asset classes, you remove the need to constantly tinker with your investment mix. Market swings don’t put pressure on you to act immediately.

• Use the tools at your disposal to monitor your portfolio. Today’s retirement providers have management tools that are easy to use and understand. And there are software programs, such as FutureAdvisor and many others, that help you make sure your current investment portfolio avoids duplication, is tax efficient, and is in line with your investment objectives.

Research, Research, Research

Having a basic understanding of different investment vehicles is a crucial part of establishing and pursuing your financial goals. Keep your eye on good media sources for the latest on what is going on in the world of finance, how international financial news may impact your investments, and what the long-term nature of the current low interest-rate environment means for your buying and borrowing power.

There are many great sources to choose from, including the relatively new (Michael Kitces’ blog, Lifehackers “Your Two Cents), and the tried and true: The Wall Street Journal, CNNMoney, The Economist (which has a strong focus on international news), and the resource I recommend most highly: Financial Times.

Oh, and keep reading Veterinarian’s Money Digest!

Not everything you read will be of immediate use in managing your portfolio, but the better you understand the economic climate around you, the better positioned you’ll be to make adjustments as needed.

Pay close attention to fees, and don’t forget to rebalance.

Working without an advisor will save you some money for sure, but look closely at the transaction fees and any other fees charged by the brokerage service you select. And remember that few investments are truly “set and forget.” At least annually, you will want to check your investment performance and make any needed adjustments to make sure your portfolio is aligned with your investment goals.